Pick Wayne's Brain

February 15, 2014

The Myth of the One Percent

Filed under: Commentary — Tags: , , , , , , , , — Wayne A. Schneider @ 10:18 AM

If you’re like me, you probably never heard of Tom Perkins before this week. And you’re sitting at your computer naked. Tom Perkins, it turns out, who I’m sure has never heard of you or me, is what they call a “venture capitalist.” They invest in other companies, sometimes saving them and turning them into profitable companies, sometimes stripping them of their assets and taking the money for themselves, and sometimes they provide seed money for companies that eventually become hugely successful behemoths like Amazon and Google, which is what Tommy’s little venture capital firm did. And he got rich…er. We know this is true by virtue of the fact that Tommy is still, to this day, a venture capitalist. Otherwise he’d be what we call “broke.” And because he made so much money doing whatever the hell it is that he does, he thinks he’s better than you or me. So much better that he actually wrote to the Wall Street Journal to tell them that the “attacks” on the top 1%-ers were just like Kristallnacht, except for the bloodshed and the part where the top 1%-ers were gunned down in the homes into which they were forced to move. But otherwise just like that. Which is absolutely ridiculous as evidenced by the fact that he’s alive to bitch and moan about how he’s treated.

I missed it at the time (not being a consumer of the Rupert Murdoch Propaganda Dissemination Machine), but he apparently took a lot of flak for those comments. The flak must not have bothered him because in a recent interview with Fortune’s Adam Lashinsky, he told the audience that “I think the parallel holds.” (He neglected to add “minus the bloodshed and gunfire.”) This happened at a Q&A session titled “The War on the 1%.”

Asked to offer one idea that could change the world, Perkins proposed a change to Americans’ voting rights: “You don’t get to vote unless you pay $1 in taxes…If you pay $1 million in taxes, you should get a million votes. How’s that?” (In an interview after the forum, Perkins said he was simply “trying to be outrageous.”)

In all fairness when you watch him say that, he does kind of sort of look like he’s trying to be a little over the top, but he also reminds me of “Victor/Victoria,” the story of a woman, pretending to be man, pretending to be a woman. He meant it, but he was only joking, but he really did mean it. And he would be surprised to learn just how wrong he is, too.

You see, he’s wrong because he thinks such a proposal (as given) would take away the right to vote for the 47%-ers, the ones the RW capitalists think pay no taxes at all because they pay no federal income taxes. And they pay no federal income taxes because they earn too little to have to pay federal income tax. But that doesn’t mean they pay no taxes at all. If they drive they buy gas, and so they pay gasoline taxes. They also pay sales taxes on at least some of their purchases throughout the year. So it’s quite plain that they pay at least “$1 in taxes,” so they would still get to vote under the Perkins Plan. But that’s not the only thing he was wrong about.

He also said that “if Germany had American gun laws, there would have never been a Hitler.” Now, if by that he meant that had Germany had a Constitution which guaranteed some kind of right to own and carry (i.e., “keep and bear”) guns, then maybe he would be right. Maybe. But like many gun rights advocates, Perkins probably falsely believed that Hitler took away gun rights. Actually, the opposite is true. Hitler expanded gun rights and only took them away from a few. And considering that the German army had more than just guns (they had tanks, planes, and, for a while at least, submarines), it’s hard to believe the Jews could have fought their way out of Germany to find a home elsewhere. This is just lazy, NRA-style thinking.

He was also wrong when he defended Capitalism by saying, “Look, free-market capitalism, it’s what has created most of the wealth in the world, and it’s the only way to proceed. Free. Market. Capitalism.” That’s really a stupid thing to say when you apply some thought to it. You’re using a measuring rod (wealth) that only applies to one system (Capitalism) to measure how well that system (Capitalism) does at this one measure (creating wealth.) That’s like saying “American-style football is the best way to score touchdowns.” Other economic systems do not have excessive wealth as one of their goals, so naturally you won’t find many people excessively wealthy in those systems. And that’s actually a good thing and a goal we should have here in the United States. You see, Capitalism only works when money circulates throughout the system. When I sell you something, I use part of the money you give me to pay the vendor from whom I purchased what I sold you. I also use part of it to buy something for myself from another vendor. That vendor, in turn, pays his vendor for what I bought from him, and uses the leftover money to buy something else for himself. And so on and so on. (I’m not an Economics professor, so we’re not going to go into all the complicated things rich people exploit to increase their cut of these transactions.) Somewhere along the way, sometimes at many places along the way, people in the top 1% get their cut of these transactions. Except they’re not spending their cut, because they already have so much money they don’t need to spend it. As Nick Hanauer explained in his TED talk, those who make a thousand times as much money each year as you do not buy a thousand times as many things as you.

Perky also tried to gain sympathy for people in his wealth stratosphere saying, ”I don’t think people have any idea what the 1 percent is actually contributing to America.” To that I need only say two words, “Koch Brothers.”

To which Perky would answer that they’re suffering from “persecution,” and that our nation’s progressive tax code is “persecution” of the wealthy. Not at all. When this country had a real progressive tax code (back when we had the last fiscally conservative Republican President, a man known as Dwight David “Ike the Spike” Eisenhower), high tax rates kept income inequality in check. When we hear the rich paid 91% in taxes back in 1960, it wasn’t 91% on every dollar they earned. It was 91% on every dollar they earned above $300,000. It was 83% on income between $100,000 and $150,000. [For proper perspective, a head of household paid 20% tax on income up to $2,000, and it went up about 1-4% for every $2,000 for a while. Then the cutoff levels increased between tax brackets until you reached 91% on all income above $300,000. On a total income of $2,000, you would pay $400 in income tax, leaving you $1,600 for your other expenses in life. People actually lived on that kind of income back then. On total income of $400,000 (and there were people making that kind of money, and even more), you would pay $326,480 in income taxes, leaving you a mere $73,520 on which to support your family. And remember, you could get by on only $1,600, so there was really no reason to bitch and complain because an additional $100,000 of income brought you only $9,000 after taxes. At that point, you could already have anything you wanted – short of what the super-duper-uber-rich had – and you probably didn’t even notice that extra money.] It may sound like punishment if you were the type who felt you should have every dollar of income you “earned,” but in reality it helped keep our country back then from turning into what our country has become now – a land where having billions of dollars puts you in control of practically everyone else’s lives. Back in 1960, we decided that you, as an individual not elected to govern, should not have that much power over people’s lives. We weren’t going to take everything, but we were also going to make sure you didn’t end up with everything. Because then the money wouldn’t flow and the economy would collapse.

And speaking of income inequality, Perky wouldn’t go there. After calling the government “a giant beast which has to be fed,” he claimed taxes would have to go “up and up and up.” (Really? Did his accountant tell him how much less in taxes he started paying when Bush cut taxes in 2001?) But when he was reminded that government financing helped create the Internets (“It’s a series of tubes.”) that helped make him wealthy, he shot back, “Adam, you’re barking up the wrong tree. I’m not going to go there.” You see, there are incredibly wealthy people, like Tom Perkins, who think that they owe nobody for the vast amount of wealth they’ve managed to accumulate in life, one way or another. They think of themselves as “self-made millionaires.” The reality is that there is no such thing in this country as a self-made millionaire. Whether you did it legally or illegally, every dollar you earned was done within the framework of a Liberal Society that provided both the foundation and some of the building blocks that make it possible for you to make that money. You didn’t build the roads you used to move your goods around. You didn’t hire, train, and headquarter the police forces you relied on to protect you and your business. You didn’t create the education system and hire the teachers it uses to train the people you would hire to do the things you can’t do yourself. You didn’t get rich by yourself; you did it with our help. So you are not entitled to “every dollar you earned.” In fact, when your other business ventures failed before this one took off, you didn’t end up on your own. We were there to help you out, even to help you get started on the business that did make you rich.

And you rich people are not the true job creators, a myth the Republican party you bought and own has been spreading for decades. You don’t create jobs, you create businesses that supply consumers (most of them middle class) with goods or services they want. (And sometimes people who have nothing start those businesses.) If consumers don’t want what you have to offer, you’re not going to keep employing people to do nothing, so you’re going to fire them. That doesn’t make you a job creator at all. So stop acting like the country owes you a favor.

So to all you Tom Perkins in the world, get over yourselves. You’re not more important than the rest of us, and you don’t deserve to have more of a say in who governs this country than we do. You get one vote. We all get one vote. And whether or not you choose to believe it, the world can get along just fine without you, Tom Perkins. Do you really think you can get along without us?

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